Ray Dalio: evaluation

Transcript context

…If you had to describe it in its most fundamental terms, your advantage as an investor compared to other professionals — is it that you’re smarter, you process more information, you have better managerial methods? How would you pin down your unique advantage and expertise? Well, a few things. I systemized and built an organization that systemizes the process to seek the timeless and universal truths of the cause-effect relationships. We have 1,400 people or so. We spend hundreds of millions of dollars each year on data and quantitative. I think it’s really the building of timeless and universal decision roles that have gone back. When I say timeless and universal, I learned early on that many things that happened to me and came as a surprise were things that didn’t happen in my lifetime, but happened many times before. The first of those — 1971, I was clerking on the floor of the New York Stock Exchange when, on August 15th, President Nixon got on and said, “We are not going to pay the gold.” I went on the floor of the stock exchange. That never happened to me before. I thought there would be a crisis and everything would go down, and I was totally wrong. I found out that the stock market that morning went up more than it had in decades. That led me to research and find out that on March 5th, 1933, President Roosevelt did the exact same thing, and it led to the exact same result. At that mistake, I learned that things that happened in my lifetime, but happened before and I didn’t experience, were good rules. I needed to study, for example, the dynamic of the Great Depression. By studying that dynamic of the Great Depression, I and we at Bridgewater were able to anticipate the 2008 financial crisis and do very well in it, only because we looked at those things that happened before. It’s that which led me to do this study. I did this study not to write a book. I did the study because these things that are happening now did not happen in my lifetime, so I wanted to study the cycles, like the rise and decline of reserve currencies, empires, and so on. I needed to study the last 500 years. What is conveyed in this book is what I learned from doing those studies, those patterns, and I put it out there for people to judge for themselves the merit of them. They can judge for themselves. I understand different people might have different views, and it’s totally their prerogative. It’s out there for people to learn, and it’s been that approach and the systematization of that approach with a lot of great people that has been the basis of our success. Your management idea for radical transparency — where did that come from and how did evolve? When did you start it?…

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